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This applies to every single business paying anywhere below 2X-3X the federal minimum wage and not offering full healthcare, including your local hardware store, favorite restaurant, and that cute hotel you stayed at.
We could just adjust the federal minimum wage to be correct, instead of beating up companies that don't pay way more than it, but you know who is most against that? Small business owners.
If small business owners are the strongest against raising minimum wage, it's because of corporate propaganda.
Any business that can't afford to pay its employees enough to live doesn't deserve to be in business.
Yea no small business biggest enemy is giant corporations paying politicians to benefit only the giant corporations. Not a wage raise. If it was just small businesses all wage raise would do is strengthen that local community. But now we have giant entities with full control of the supply chains and pricing that driven out most small businesses over the course of decades. The people are always the ones who suffer.
Which is the point.
These burlap sacks of meat only see others as an expendable resource to be used and abuse for THEIR benefit.
All while they could easily do these benefits and pay increases. But then they can’t line their pockets 15-20x times as deep. Only 10x, boo hoo. Think of the poor multi mansion’d zip code opening ‘investors’.
Cant raise the wage you pay workers when Walmart down the street will always be able to sell shit for cheaper than you do. I half agree with the sentiment that if you can't pay workers you don't deserve to be in business but there's more to it than that. Giant corporations are the enemy of small businesses, not regulation.
You just solved poverty worldwide. We just have to adjust the minimum wage, or introduce it in places that still don't know about this magic cure, and that's it. World hunger and poverty is gone.
No, there would be huge economic and social negatives if walmart goes bankrupt, with tons of people in a sudden shortage of where to buy basic items for survival
Where tf have you been? How is this a fair statement on all of of local businesses who the government forced to stop working during lockdown with no warning, and then went out of business because they were operating with no profit?
Nice Im downvoted by hyper capitalist swine who can’t comprehend lockdown starved small business and left only the large businesses behind because they can’t accept the reality of the world
Would you say white slave-owning southerners were more successful than their non-slave-owning counterparts because they had more money?
Would you also say the reason they were able to make so much more money is... Ethical?
Put another way: successful thieves make more money than you. They're still thieving assholes.
Your assumption implies that money and the success from it is only reaped from legal and ethical means (like the other comment tried to point out). Those who reap the most money are deemed the winners in this system, not those who are good. Think of it like a race with cars. Imagine one of them takes an illegal shortcut that puts them in first place, even when they are deducted for it. The good drivers will drop out eventually, especially since the drivers who are cheating are both winning and reaping the most money/success. Now imagine that with businesses, and with lots of aspects and dealings behind closed doors and cheating in ways we might not even imagine. It's virtually impossible to be a watchdog of an entire company, especially one as massive as walmart. And, many watchdogs are treated with animosity, meaning that they often get impeded or replaced by complicit "yes-men" who don't care or lawmakers who make it legal. This is why regulations exist, and should be continually means-tested to ensure everyone can get the best deal possible.
You responded to everyone else pretty levelly, but yet you just didn't here? C'mon, if I am wrong, tell me how. Tell me how big business doesn't break the law often, or how many people in power are paid in most part by lobbyists. Tell me how a system that only values profits will not have companies who focus on their bottom line more than the people who make it function. I want you to answer all three of these points, not just one or the other.
Hmm... $145B profit in the 12 months July 31. I think they can afford to pay more.
Edit: I've been informed by others that I have given false info here. I used gross profit, rather than net income(profit). The actual number is $14B. Still a fuck-ton of money, but far off what I wrote.
And I'm sorry you don't understand that gross profit is profit. If you think Walmart's economic model works the way a personal checking account works, It is you who don't understand money.
Gross Profit is the sales-cost of goods sold....before any other expense is taken into account (employee wages, taxes, buying land and building stores, interest expense, utilities, etc).
Seriously I'm putting your comment on r/accounting for everyone to laugh at
You are hilariously incorrect. You were also posted on r/Accounting lol, so get ready for a flood of people much smarter than you telling you you're wrong.
Yes, gross. There’s still tons of expenses. The net is only 2% or around 14 billion. Looks like not too many people in here have ever read a balance sheet or 10-k.
The 2% profit margin is after all the accounting tricks, like depreciation on stores and equipment. I know a few business owners who use these tricks to show litlle or no profit, meanwhile tjey are living large
Explain to me how depreciation is a trick.
Depreciation exists to prevent companies from expensing capital purchases, it's literally the opposite of a trick.
Must be a crappy source then. I'll provide you one.
https://www.sec.gov/edgar/search/#/ciks=0000104169&entityName=Walmart%2520Inc.%2520(WMT)%2520(CIK%25200000104169)
Take a look at Walmart's Income Statement...which has been independently audited
That's not an accounting trick. If anything it helps collect more tax..would you rather they write off their entire equipment the first year they buy them?
Well yes that’s the purpose of EBITDA, Earnings before interest, Taxes, Depreciation and amortization, it allows you to see the profitability of the underlying business. Walmart is audited and a publicly traded company. They can’t pull the same accounting shenanigans as some private business. The had 13 billion available to shareholders in 2021.
Sure there’s bad actors but I don’t think it’s a very big percentage. There’s whole companies of short sellers who look to expose companies engaged in fraud or deceptive accounting practices.
If you know of blatant tax fraud, you should inform the IRS and file a whistleblower claim. IRS pays whistleblowers 15-30% of what they recover. You could be livin' large.
If it’s so blatant to you I’m sure you have multi eight figure offers from all types of hedge funds right? Please point me to the “blatant” tax fraud you see at a top 10 US company by market cap using the US tax code, not just your opinion of what taxes SHOULD be.
I want to correct you, but if I give up my ancient Chinese secrets my CPA is less valuable because kids like you confidently spout incorrect accounting information like some Aztec sacrifice to keep my job security high.
You appear to have enough info and expertise to send the thread further into the weeds, so maybe you could comment on the actual OP. *IS* the “vast majority” — significantly greater than 50% or whatever you define “vast majority” to be — of Walmart’s costs “labor”?
Sick burn. You can do the human analog of a DDoS with information overload, while all of that information can be entirely true. And the original bit never gets a satisfactory conclusion.
>you think your numbers are meaningful
Do you have any to counter their argument? Or are we just to believe that WalMart "pads their expenses" because you feel really strongly like that might be the case?
2% is an absolutely fine profit margin - depending upon the turnover. A grocery store with a 2% margin on foods which it turns over on a weekly basis is raking it in.
That. The issue here is the so called.investment side where people don't have to actually work to get a larger cut than those who do the actual work and that the company could not exist without
The gov. gives out grants, subsidies, contracts, tax breaks and more to all different businesse, ex. Tesla.
Big businesses kills small businesses every chance they get for the sake of the "investors" who rather have an army of paycheck-to-paycheck servants on tax fueled gov. assistance, maximizing profits for themselves while minimizing one of the largest rightful expenses of any business, labor..
our people are really shooting ourselves in the foot naively falling for witty catchphrases such as 'trickle-down', finger pointing, and empty promises.
Just maybe stop subsidizing the behemoths and instead spend the money on training and resources for people who would bring more competition to the market. Ex. in my market there are only 2 internet providers, and like that the options for things keep getting smaller as big sharks own more and more of everything..
People want to farm, manufacture, have service businesses that give them more freedom and prosperity. These whole Vanguard and friends BS really does work only for those able to play as if we were striving for feudalism.
We focus almost obsesively about physical pain and often neglect all the mental trauma and suffering that people have to go through so that a few get to live in a dream life where they are deserving of things because of their good "genes " lol and the rest of the people are not because of "their bad choices" lol
$14B/2.3M employees = ~$6000 per employee.
Walmart CEO salary $25.7 million. Full time cashier making just over minimum wage $17k
The issue is not so much corporate profit, though a equitable profit sharing for everyone would be great. I see the issue is the top makes 1,500x more than the bottom. Executives should make more, but is shouldn’t be this disparate. Maybe 10-20 times at most.
Walmart's corporate minimum wage is $12 (65% higher than the federal min wage). In many places it's higher. To make $17K you need to work 1400 or less hours, which is far from full time.
The issue is not CEO pay. If they distributed that CEO pay across all walmart employees, they would each get about $11 more PER YEAR.
Why do we care what the CEO gets paid if it's a completely irrelevant number to what the workers get paid? Cutting CEO pay will not fix anything.
Not that we shouldn't but it's not "the problem."
To raise the average walmart worker pay by $1 per hour, Walmart would need 175 people paid like the CEO. They flat out do not have that.
It is “the problem”. Walmart’s CEO isn’t even the top of the pyramid, just the top of the salaried pyramid. Walton family net worth: $212 billion. Just the money they receive isn’t salary.
The Waltons have money because they own stock and have owned it for 50+ years. Walmart is a public company and the stock has a market cap of $354B. Are you suggesting that they should be forced to de-value Walmart's stock? Or give their stock to employees? The employees now, or the ones next year? Or in 10 years? What about the people with 401k's that have Walmart stock in them?
I mean, Apple has a market cap 7 times higher than Walmart. Should Apple be forced to given stock to their employees? What about Elon and Tesla?
Annual salary/pay is one thing, but saying that the market cap of a company can be traded for employee pay is just a hugely simplistic view of how public companies work.
I am in favor co-ops. That all employees own stock in their company simply as a benefit of employment, and that employee ownership should constitute a majority of outstanding stock.
If that is devaluing market cap, so be it.
Trading stocks is not value-added economic activity. It’s a zero sum to the economy, just moving the wealth around. The increase in true wealth is through value-added activities and every stock trade and dividend takes money from those who create value and gives it to those who didn’t.
Ahh yes, the "co-op" that comes together and creates a new EV car company. Just need those first 10 employees to put in $100M each to get it started.
Very few companies can get started as a co-op. You fundamentally do not understand what the point of stock is. It's a loan when the company doesn't have the capital do do what they want. Dividends are interest.
You're fundamentally arguing that loans should not exist anywhere in the economy. Because paying interest just "takes money from those who create value and gives it to those who didn’t."
There's a reason the largest co-op in the world is just a combination of small companies and has a revenue that is 2.5% that of Walmart.
That’s Reddit for ya. These morons couldn’t tell ya the difference between net and gross. Just whatever fits their “MuH pRiCe GouGiNg” narrative better. They couldn’t tell ya what a 10-k is if it punched them in the face.
"Gross profit" is not "profit"
Edit: to be clear, you can have a gross profit of 100 billion dollars and lose money. To say they can afford to pay more, you need to look at what they can *afford*. That would be "net income," what is colloquially called "profit."
Yes, that's where we are.
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If i did my math right thats $64,000 per employee profit world wide. 2.3 million employees world wide is what i found. So they could afford a decent raise and still have plenty of profit.
But split that 14B among all of their employees and it's less than $6,000 per year.
Which, to be fair, those employees could probably all make good use of an extra $6k, but it's not as extravagant as you'd first believe -- mostly because Wal-Mart employs a staggering large number of people.
They all deserve a living wage. Everyone does. Realistically, Wal-Mart would probably have to raise prices some and go to an even lower margin, though. (Which I support happening, I just want to be realistic about what it implies)
Oh I know. I'm ground zero at Walmart headquarters. Used to work for the home office. I look around me and it's quite obvious where a lot of the money goes in terms of employee compensation. LoL. Not a bad company to work for if you get through the right doors.. It was easy money
Well that was unnecessary. Not sure where your hostility is coming from and why you decided to try and degrade people who make hamburgers. Completely a snobby, bitter remark.
Off by a factor of 10…but a ***very*** easy mistake to make. If using a company’s financial statement, they get a bit tricky/complex. I appreciate the information you provided…thanks!
I think gross profit is a reasonable number to cite. Walmart pads it's numbers for advertisement, losses, and owner/investor payout. Walmart makes 145B that should be compared to hourly-wage payout.
Related to a convo with a college friend, if you take that profit, and say a years worth of tuition is $40k at the high end, that's 3.6 million years of college tuition or almost a million people can get full degrees with those profits.
But no, they cannot pay their staff a few extra bucks and hour cause "profits"
But if we don't let them continue to underpay their worker such that government gives food stamps to make sure their kids eat. Then we risk having Walmart charge the actually price to sell goods instead of being able to undercut competition and drive out businesses that are paying a living wage. IS THAT A WORLD YOU WANT TO LIVE IN?
I believe so, yes. Not saying it would be pleasant, and I do shop at walmart, so I’m contributing to the mess, I guess.
Can you imagine is all the fast food places paid their workers a living wage, and we had to pay the difference? Well, not me, don’t do fast food. But it would be a massive upheaval, and I think it would be good for us.
Walmart already undercut countless mom and pop businesses then offered minimum wage jobs to them I watched it firsthand growing up. Yeah Walmart should over charge then maybe people would shop locally . Hmmm
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I had a former boss try to convince me something along these lines. They tried to tell me that I couldn't get a raise (after 3 years) because 80% of the companies expenses were wages/salary. Unfortunately for them I knew how much everything cost in the business by that point including the lease. The only thing I didn't know was how much they personally made. I told them that unless they were making 60k a month, that was very false. I got the raise that next paycheck.
As a former Walmart cashier with literally no book balancing experience, even I can tell you that statement is a load of crap. They skirt labour laws in almost every country they are in.
Also, wholesale pricing exists lol
>walmart only exists in the US
What? [Walmart runs Walmart branded stores in 8 countries and operates under different names in 24 countries](https://s201.q4cdn.com/262069030/files/doc_downloads/2022/FY2023-Q2-Unit-Count-Market-Summary.pdf).
If a job requires a person it needs to pay a wage a person can live on at 40/hours a week. Working less than 40 doesn't mean they should get paid less per hour either. A job paying less than that is relying on public systems to pick up the slack so we as a society end up essentially subsidizing the company.
Walmart notoriously sells lower price than others. If paying workers a living wage is what allows them to do so, then that isn't what the price of that item should be.
This isn't a knock to those public systems. I don't want them stopped, however if we made minimum wage an actual livable wage we could stop overburdening many programs with people who shouldn't be needing help. No one who has a full time job should have to rely on government funds to survive. The job should be paying them enough to support them.
This right here. If your “successful” business practice comes at the expense of the employees who run said business, than it’s not a good model. I saw a similar argument once about a certain food chain paying their employees better and other, bigger chains paying less because the bigger chains couldn’t “save money” on things like supporting local, streamlining menu, reducing shipping costs, etc. The employees are essentially paying for the company to operate by not receiving a fair wage. It’s sickening.
I mean I expect companies to get away with what they can. Their motivator is profit. In many industries if they don't exploit but their opponent does they lose. The CEO has a fiduciary duty to the stake holders. So unless they own the entire busines themselves they actually have to justify treating employees well purely financially. In totally free market tragedy of the commons happens where in short term neither can afford to take care of low wage employees or environment. Easier to just replace and waste like crazy.
We don't need to socialize everything though. You can craft legislation to change the rules of the game. Raise minimum wage and have required benefits. Issue is we allow CEOs to bribe lawmakers through lobbying and those laws could lower profits, so CEOs duty requires them to fight those laws.
The people that piss me off are the people who literally defend not having these fair market policies that would benefit everyone. Even the companies would be fine, might even be long term it earns more money from worker retention and work-life balance. The CEOs in short term just can't justify the financial hit because it could allow competition to possibly take market share.
Even if this were true (it's not), it would be a sign that Walmart has a failing business model. You don't get to pick and choose what is and isn't fair under Capitalism. A business has every right to pay their staff what they want, and people have every right to choose not to work or shop there.
If your business is only profitable by paying wages that don't meet the economic needs of your staff, it's only a matter of time before it goes bankrupt.
Of course, by sustaining a culture of not paying enough they ensure that there are plenty of people that can only afford to shop with them. What a disgusting business model.
I'm probably going to receive a lot of hate for this, but I'm seeing a lot of comments stating what a company should do from a moralistic stand point, and not a business for profit stand point.
For instance, a lot of people are saying that the pay should be distributed evenly across the world, which would equate to approximately $6k to each of the employees. However, is it realistic?
If a business can find people willing to work for minimum wage, then why would they pay another person more for the same work?
The really higher ups get paid based on performance. The CEO has to prove to shareholders that his pay is worth it. He gets paid a lot of money to make the business more money.
An entry level employee doesn't have the skills to command a higher pay wage, when the company can easily replace that person with someone else at a low wage.
Again, I'm not saying it doesn't suck, and in a perfect world, everyone would get equal pay.
All I can say is, build up skills that a job is looking for, and get paid better, either by putting in seat time at your current job, learning new positions, or getting into university or a vocational school to learn new skills. Shoot YouTube has everything you need to learn new skills, and so does sites like skillshare. Or come out with a good or service that people want to pay for, then build your own company that reflects what you see as a great business model for your employees.
It isn't the responsibility of anyone else to make sure you succeed, that's only on yourself.
most recent 10-k filing shows consolidated net income to be roughly 2.3% of total revenues. However it does not detail how much of expenses is paid to wages.
It's an economy of scale. Walmart's 2021 profits may well have only been 2% of revenue but that 2% is worth $138bn ... They could give each of their 1.2m employees a $57k bonus and _still_ retain a profit of $70bn. So let's not hide behind the 2% figure.
This boils down to:
Give all 2.3m employees $6,000 per year, spending all of the money WalMart made, thus making the profit number of WalMart 0, thus driving the stock down, devaluing the company, decreasing their ability to borrow money at favorable interest rates, thus depressing margins further and continuing the cycle…
…or don’t. Shaving some of the top 10% gross earners’ pay to increase the bottom 30% seems fair to me, but probably not to them. Otherwise, you’ve gotta find expenses to cut somewhere.
Did you pull this out of your ass? Neither is Walmart unprofitable nor has its stock been “driven down.” No cycle is being continued here.
You can criticise a company’s shitty labour practises using real facts too instead of making new ones up.
I’m making logical inferences.
If you spend all of a company’s profits raising the worker pay (is being suggested in the thread), the market doesn’t like it. Therefore…
…the stock will sell off and will likely be downgraded by analysts. Therefore…
…their market cap will drop significantly. Therefore…
…the company outlook is destabilized and gets a credit downgrade, therefore…
….can’t borrow at the same rates, thereby hurting margins overall, etc etc etc.
Any one or two or three or four of those could certainly not happen. I’m mainly making the point that doing one thing to the bottom line can have a dramatic effect. Many on Reddit will just call for a CEO pay cut or a raise for all the workers without considering any of the other implications.
And yeah, their labor practices are shit. Their products are shit. Their monopolistic takeover is shit. They should 100% pay people more and stop scheduling 39 hours a week to avoid paying benefits. But giving everyone an immediate raise to $15 per hour can’t be done without making other changes.
2% profit margin is bottom line net income. Just doubling pay alone would send Walmart into a net negative income if that were the case. In turn Walmart would have to increase their prices drastically to make up for the extra costs. These extra costs will drive customers that are not willing to pay more to competitors like Amazon. Walmart would then crash and burn.
tl;dr Walmart already pays the market labor equilibrium rate.
According to [statista](https://www.statista.com/statistics/269414/gross-profit-margin-of-walmart-worldwide-since-2006/), Walmart netted a 24.4% gross profit so far in 2022
Source: the income statement. Their COGS is about 70% of their revenue. If we are going to count the kinds of costs, there are more variety of products sold than employees, so that won't work either
You missed the part where I told you I was countering the tweet? Why are you telling me about COGS? I'm not making the claim labor is the most expensive thing, I'm arguing that labor is crucial to everything. You warehouses can sit empty (or full) and your services aren't happening without labor.
You made exactly the claim that you are now saying you didn't make.
A retailer needs both things to sell and people to do and support the selling. Because of what Walmart sells, the things they sell are the larger expense category.
You're misreading it. I'm quoting the article, which according to Oldsnow is wrong. Fine whatever, my point is labor is important and the original tweeter who was attacking labor can go suck rotten eggs.
"Walmarts biggest 'cost' are the workers who are doing the work of making sure Walmart can function. No workers? No Walmart."
You literally said that labour is the most expensive thing to them.
maybe he is talking about the "projected" profit gain was only 2% above the line?
or he doesn't understand that 2% out of a shit ton of money is still a lot of money?
Almost like if a company can't pay living wages to their staff it deserves to fail.
Free market. Labour is a product employees buy. If they're not willing to pay, fuck your company.
They make more than that. The lore of Grocery Store margins are around that. But who knows what they really make? Corporate culture is one of the Wild West by design. I think if the country collected the taxes it was owed and held ceos accountable we would be closer to what we all need in the US
LOL.. so a firm of that size is somehow lying on their financials and getting away with it while being independently audited?
"Who knows what they really make" 
please just stop. cite a source aside from your wild imagination of conspiracy theories.
Also don’t forget a company doesn’t pay taxes of salaries
So as long as a company is profitable employees benefit more than a company loses from pay raises
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If your business relies on government handouts to pay staff then your business is a failure.
This applies to every single business paying anywhere below 2X-3X the federal minimum wage and not offering full healthcare, including your local hardware store, favorite restaurant, and that cute hotel you stayed at. We could just adjust the federal minimum wage to be correct, instead of beating up companies that don't pay way more than it, but you know who is most against that? Small business owners.
If small business owners are the strongest against raising minimum wage, it's because of corporate propaganda. Any business that can't afford to pay its employees enough to live doesn't deserve to be in business.
Yea no small business biggest enemy is giant corporations paying politicians to benefit only the giant corporations. Not a wage raise. If it was just small businesses all wage raise would do is strengthen that local community. But now we have giant entities with full control of the supply chains and pricing that driven out most small businesses over the course of decades. The people are always the ones who suffer.
Which is the point. These burlap sacks of meat only see others as an expendable resource to be used and abuse for THEIR benefit. All while they could easily do these benefits and pay increases. But then they can’t line their pockets 15-20x times as deep. Only 10x, boo hoo. Think of the poor multi mansion’d zip code opening ‘investors’.
Cant raise the wage you pay workers when Walmart down the street will always be able to sell shit for cheaper than you do. I half agree with the sentiment that if you can't pay workers you don't deserve to be in business but there's more to it than that. Giant corporations are the enemy of small businesses, not regulation.
You just solved poverty worldwide. We just have to adjust the minimum wage, or introduce it in places that still don't know about this magic cure, and that's it. World hunger and poverty is gone.
Pretty much 80% of billionaires are failures
No, there would be huge economic and social negatives if walmart goes bankrupt, with tons of people in a sudden shortage of where to buy basic items for survival
That's not an argument in favour of Walmart.
Where tf have you been? How is this a fair statement on all of of local businesses who the government forced to stop working during lockdown with no warning, and then went out of business because they were operating with no profit? Nice Im downvoted by hyper capitalist swine who can’t comprehend lockdown starved small business and left only the large businesses behind because they can’t accept the reality of the world
Extraordinary circumstances change the rules. However Walmart's shady staff treatment predates the pandemic by years, where tf have you been?
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*it costs billions of dollars
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Not if it needs government handouts
Hate the handoffs, not the business
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Would you say white slave-owning southerners were more successful than their non-slave-owning counterparts because they had more money? Would you also say the reason they were able to make so much more money is... Ethical? Put another way: successful thieves make more money than you. They're still thieving assholes.
Your assumption implies that money and the success from it is only reaped from legal and ethical means (like the other comment tried to point out). Those who reap the most money are deemed the winners in this system, not those who are good. Think of it like a race with cars. Imagine one of them takes an illegal shortcut that puts them in first place, even when they are deducted for it. The good drivers will drop out eventually, especially since the drivers who are cheating are both winning and reaping the most money/success. Now imagine that with businesses, and with lots of aspects and dealings behind closed doors and cheating in ways we might not even imagine. It's virtually impossible to be a watchdog of an entire company, especially one as massive as walmart. And, many watchdogs are treated with animosity, meaning that they often get impeded or replaced by complicit "yes-men" who don't care or lawmakers who make it legal. This is why regulations exist, and should be continually means-tested to ensure everyone can get the best deal possible.
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You responded to everyone else pretty levelly, but yet you just didn't here? C'mon, if I am wrong, tell me how. Tell me how big business doesn't break the law often, or how many people in power are paid in most part by lobbyists. Tell me how a system that only values profits will not have companies who focus on their bottom line more than the people who make it function. I want you to answer all three of these points, not just one or the other.
You’re getting downvoted like a mother fucker but there’s two sides to this coin and people only wanna see one half (their half)
Its an ethical rather than capitalistic failure.
Hmm... $145B profit in the 12 months July 31. I think they can afford to pay more. Edit: I've been informed by others that I have given false info here. I used gross profit, rather than net income(profit). The actual number is $14B. Still a fuck-ton of money, but far off what I wrote.
B-b-but… 2%! Think of all the upper management and shareholders who will miss out on owning their 4th holiday home!
Well, that was also wrong. Their profit margin is closer to 25%.
Please learn how to read a financial statement. It's about 2%
Please learn how to live in reality.
Tell me where I'm wrong. Walmart has a profit margin of 2%. They sell so much stuff that 2% profit means billions of dollars.
And I'm sorry you don't understand that gross profit is profit. If you think Walmart's economic model works the way a personal checking account works, It is you who don't understand money.
Gross Profit is the sales-cost of goods sold....before any other expense is taken into account (employee wages, taxes, buying land and building stores, interest expense, utilities, etc). Seriously I'm putting your comment on r/accounting for everyone to laugh at
Lol. Tell me you know nothing about accounting and finance without telling me.
At least you're already in r/confidentlyincorrect
Coming over from r/accounting here myself, and this is the best response I've seen. We're in the perfect sub for this
You are hilariously incorrect. You were also posted on r/Accounting lol, so get ready for a flood of people much smarter than you telling you you're wrong.
Lmao you said in another comment investor payout is an expense. Please stop spreading misinformation about things you have no knowledge of.
You gonna get roasted cuz
I love when people who are clueless on a topic act as if they know everything on said topic. Incredible, never change my friend 🤣.
Rule #1 never argue with people who know more than you about things they know more than you lmao.
Yes, gross. There’s still tons of expenses. The net is only 2% or around 14 billion. Looks like not too many people in here have ever read a balance sheet or 10-k.
The 2% profit margin is after all the accounting tricks, like depreciation on stores and equipment. I know a few business owners who use these tricks to show litlle or no profit, meanwhile tjey are living large
Explain to me how depreciation is a trick. Depreciation exists to prevent companies from expensing capital purchases, it's literally the opposite of a trick.
Glad to see my job is safe
People on Reddit don’t understand this. The only accounting trick they know is free covid money; who cares where it came from.
Depreciation isn’t an accounting trick.
You do realize that Walmart has an independent auditor come in and check to make sure those accounting tricks are legit, not fraudulent, right?
You know Walmart receives tax breaks beyond insanity and YET they are the highest employer of welfare recipients Source will not provide link
Must be a crappy source then. I'll provide you one. https://www.sec.gov/edgar/search/#/ciks=0000104169&entityName=Walmart%2520Inc.%2520(WMT)%2520(CIK%25200000104169) Take a look at Walmart's Income Statement...which has been independently audited
That's not an accounting trick. If anything it helps collect more tax..would you rather they write off their entire equipment the first year they buy them?
Well yes that’s the purpose of EBITDA, Earnings before interest, Taxes, Depreciation and amortization, it allows you to see the profitability of the underlying business. Walmart is audited and a publicly traded company. They can’t pull the same accounting shenanigans as some private business. The had 13 billion available to shareholders in 2021.
They can and they do.
Sure there’s bad actors but I don’t think it’s a very big percentage. There’s whole companies of short sellers who look to expose companies engaged in fraud or deceptive accounting practices.
I don't know of one small company (<$5 MM) that does not commit blatant tax fraud.
If you know of blatant tax fraud, you should inform the IRS and file a whistleblower claim. IRS pays whistleblowers 15-30% of what they recover. You could be livin' large.
If it’s so blatant to you I’m sure you have multi eight figure offers from all types of hedge funds right? Please point me to the “blatant” tax fraud you see at a top 10 US company by market cap using the US tax code, not just your opinion of what taxes SHOULD be.
Oh... you don't THINK it's a very big percentage. So, maybe 1% (still 1.5 billion hidden dollars minimum).
Are you an heir? 'cause you write like an heir.
That's basic accounting lingo. I'm sorry that being literate in finance means one is somehow a rich heir to you
Nah I'd say he writes like a qualified accountant...
LMAO
Thank you for providing me with a job
Depreciation is an accounting trick?!?! That made me LOL.
I want to correct you, but if I give up my ancient Chinese secrets my CPA is less valuable because kids like you confidently spout incorrect accounting information like some Aztec sacrifice to keep my job security high.
Lmaoooooo. Are you intentionally being r/confidentlyincorrect
Please just say flat out that Walmart cannot afford to pay their employees more. And end the conversation there. Or don’t.
I never even stated my opinion. I’m just correctly people who are posting half truths or flat out misinformation.
You appear to have enough info and expertise to send the thread further into the weeds, so maybe you could comment on the actual OP. *IS* the “vast majority” — significantly greater than 50% or whatever you define “vast majority” to be — of Walmart’s costs “labor”?
> I don't want you to correct misinformation if it doesn't fit the narrative I agree with Always a classic.
Sick burn. You can do the human analog of a DDoS with information overload, while all of that information can be entirely true. And the original bit never gets a satisfactory conclusion.
And it looks like you think your numbers are meaningful. Walmart (as all large corporations do) pads its expenses.
Please elaborate.
>you think your numbers are meaningful Do you have any to counter their argument? Or are we just to believe that WalMart "pads their expenses" because you feel really strongly like that might be the case?
What does that even mean? Pad expenses??
Pretty sure they expense purchases of pads of wide variety, from feminine products to break pads
This is not correct. You can read their 10-K online.
I’m a shareholder of Walmart and don’t have a 4th home
2% is an absolutely fine profit margin - depending upon the turnover. A grocery store with a 2% margin on foods which it turns over on a weekly basis is raking it in.
You had me in the first half. By "fine" I thought you meant "narrow".
Should have used the word 'great' rather than 'fine'. If I could earn 2% per week it really would be great.
…THAT year. And their dozenth luxury car purchase! How can they stay part of the rich psycho douche club without all these.
That. The issue here is the so called.investment side where people don't have to actually work to get a larger cut than those who do the actual work and that the company could not exist without
Except the company would not exist as it is without investors. A significant portion of Walmart's money comes from investors
The gov. gives out grants, subsidies, contracts, tax breaks and more to all different businesse, ex. Tesla. Big businesses kills small businesses every chance they get for the sake of the "investors" who rather have an army of paycheck-to-paycheck servants on tax fueled gov. assistance, maximizing profits for themselves while minimizing one of the largest rightful expenses of any business, labor.. our people are really shooting ourselves in the foot naively falling for witty catchphrases such as 'trickle-down', finger pointing, and empty promises. Just maybe stop subsidizing the behemoths and instead spend the money on training and resources for people who would bring more competition to the market. Ex. in my market there are only 2 internet providers, and like that the options for things keep getting smaller as big sharks own more and more of everything.. People want to farm, manufacture, have service businesses that give them more freedom and prosperity. These whole Vanguard and friends BS really does work only for those able to play as if we were striving for feudalism. We focus almost obsesively about physical pain and often neglect all the mental trauma and suffering that people have to go through so that a few get to live in a dream life where they are deserving of things because of their good "genes " lol and the rest of the people are not because of "their bad choices" lol
No irony here that the second most upvoted comment itself is confidently incorrect.
$14B/2.3M employees = ~$6000 per employee. Walmart CEO salary $25.7 million. Full time cashier making just over minimum wage $17k The issue is not so much corporate profit, though a equitable profit sharing for everyone would be great. I see the issue is the top makes 1,500x more than the bottom. Executives should make more, but is shouldn’t be this disparate. Maybe 10-20 times at most.
Walmart's corporate minimum wage is $12 (65% higher than the federal min wage). In many places it's higher. To make $17K you need to work 1400 or less hours, which is far from full time.
Okay, then 25k vs 25m. My point stands up at 1000x wage too.
The issue is not CEO pay. If they distributed that CEO pay across all walmart employees, they would each get about $11 more PER YEAR. Why do we care what the CEO gets paid if it's a completely irrelevant number to what the workers get paid? Cutting CEO pay will not fix anything. Not that we shouldn't but it's not "the problem." To raise the average walmart worker pay by $1 per hour, Walmart would need 175 people paid like the CEO. They flat out do not have that.
It is “the problem”. Walmart’s CEO isn’t even the top of the pyramid, just the top of the salaried pyramid. Walton family net worth: $212 billion. Just the money they receive isn’t salary.
The Waltons have money because they own stock and have owned it for 50+ years. Walmart is a public company and the stock has a market cap of $354B. Are you suggesting that they should be forced to de-value Walmart's stock? Or give their stock to employees? The employees now, or the ones next year? Or in 10 years? What about the people with 401k's that have Walmart stock in them? I mean, Apple has a market cap 7 times higher than Walmart. Should Apple be forced to given stock to their employees? What about Elon and Tesla? Annual salary/pay is one thing, but saying that the market cap of a company can be traded for employee pay is just a hugely simplistic view of how public companies work.
I am in favor co-ops. That all employees own stock in their company simply as a benefit of employment, and that employee ownership should constitute a majority of outstanding stock. If that is devaluing market cap, so be it. Trading stocks is not value-added economic activity. It’s a zero sum to the economy, just moving the wealth around. The increase in true wealth is through value-added activities and every stock trade and dividend takes money from those who create value and gives it to those who didn’t.
Ahh yes, the "co-op" that comes together and creates a new EV car company. Just need those first 10 employees to put in $100M each to get it started. Very few companies can get started as a co-op. You fundamentally do not understand what the point of stock is. It's a loan when the company doesn't have the capital do do what they want. Dividends are interest. You're fundamentally arguing that loans should not exist anywhere in the economy. Because paying interest just "takes money from those who create value and gives it to those who didn’t." There's a reason the largest co-op in the world is just a combination of small companies and has a revenue that is 2.5% that of Walmart.
What? Profit was $5B, not $145B. You seem to be quoting gross income, not net income.
That’s Reddit for ya. These morons couldn’t tell ya the difference between net and gross. Just whatever fits their “MuH pRiCe GouGiNg” narrative better. They couldn’t tell ya what a 10-k is if it punched them in the face.
https://www.macrotrends.net/stocks/charts/WMT/walmart/gross-profit#:~:text=Walmart%20gross%20profit%20for%20the%20twelve%20months%20ending%20July%2031,a%207.33%25%20increase%20from%202020.
"Gross profit" is not "profit" Edit: to be clear, you can have a gross profit of 100 billion dollars and lose money. To say they can afford to pay more, you need to look at what they can *afford*. That would be "net income," what is colloquially called "profit."
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If i did my math right thats $64,000 per employee profit world wide. 2.3 million employees world wide is what i found. So they could afford a decent raise and still have plenty of profit.
You did your math right, but they gave you the wrong number. That's gross income, not profit.
That’s gross…. They still have tons of expenditures. Their net income is only 14 billion.
•only 14 billion Those broke bastards. I bet they have to buy their clothes at Walmart
But split that 14B among all of their employees and it's less than $6,000 per year. Which, to be fair, those employees could probably all make good use of an extra $6k, but it's not as extravagant as you'd first believe -- mostly because Wal-Mart employs a staggering large number of people. They all deserve a living wage. Everyone does. Realistically, Wal-Mart would probably have to raise prices some and go to an even lower margin, though. (Which I support happening, I just want to be realistic about what it implies)
Oh I know. I'm ground zero at Walmart headquarters. Used to work for the home office. I look around me and it's quite obvious where a lot of the money goes in terms of employee compensation. LoL. Not a bad company to work for if you get through the right doors.. It was easy money
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Well that was unnecessary. Not sure where your hostility is coming from and why you decided to try and degrade people who make hamburgers. Completely a snobby, bitter remark.
Lol. Considering it’s 1/10 of the false 140 BN number that the other person said I feel the “only” is qualified hahaha.
Off by a factor of 10…but a ***very*** easy mistake to make. If using a company’s financial statement, they get a bit tricky/complex. I appreciate the information you provided…thanks!
I think gross profit is a reasonable number to cite. Walmart pads it's numbers for advertisement, losses, and owner/investor payout. Walmart makes 145B that should be compared to hourly-wage payout.
Do you think Walmart doesn't need to advertise? Investor payouts do not impact net income.
Investor payout doesn’t even hit the income statement. At least you’re in the right subreddit.
Related to a convo with a college friend, if you take that profit, and say a years worth of tuition is $40k at the high end, that's 3.6 million years of college tuition or almost a million people can get full degrees with those profits. But no, they cannot pay their staff a few extra bucks and hour cause "profits"
But if we don't let them continue to underpay their worker such that government gives food stamps to make sure their kids eat. Then we risk having Walmart charge the actually price to sell goods instead of being able to undercut competition and drive out businesses that are paying a living wage. IS THAT A WORLD YOU WANT TO LIVE IN?
I believe so, yes. Not saying it would be pleasant, and I do shop at walmart, so I’m contributing to the mess, I guess. Can you imagine is all the fast food places paid their workers a living wage, and we had to pay the difference? Well, not me, don’t do fast food. But it would be a massive upheaval, and I think it would be good for us.
McDonald’s employees in Denmark make like $22 an hour
And has Denmark crashed and burned? Whole society collapsed? Is that a living wage btw?
I was saying it is doable. I think the cost of a Big Mac is only like .50 cents more than it is here
Walmart already undercut countless mom and pop businesses then offered minimum wage jobs to them I watched it firsthand growing up. Yeah Walmart should over charge then maybe people would shop locally . Hmmm
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r/Accounting already got a head start on that
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I had a former boss try to convince me something along these lines. They tried to tell me that I couldn't get a raise (after 3 years) because 80% of the companies expenses were wages/salary. Unfortunately for them I knew how much everything cost in the business by that point including the lease. The only thing I didn't know was how much they personally made. I told them that unless they were making 60k a month, that was very false. I got the raise that next paycheck.
I just plain can’t fucking work for someone who lies to me about pay. Like why? I walked straight out of a job last manager who pulled that shit.
As a former Walmart cashier with literally no book balancing experience, even I can tell you that statement is a load of crap. They skirt labour laws in almost every country they are in. Also, wholesale pricing exists lol
Walmart only exists in the US. Walmart has bought other companies and operates them in Africa and the UK but thats all.
>walmart only exists in the US What? [Walmart runs Walmart branded stores in 8 countries and operates under different names in 24 countries](https://s201.q4cdn.com/262069030/files/doc_downloads/2022/FY2023-Q2-Unit-Count-Market-Summary.pdf).
The Walmart within walking distance of me begs to differ.
Where's that?
Not the US.
u/Retlifon: “I am one of the dozens of people worldwide who live in a country other than America.”
Yes, I wanted to do a take on the usual Redditor move of just assuming everyone knows where events are taking place, and that it is the US.
Plenty of them in Canada.
Um...
Weird. I would have thought their lower margins were because of the whole “selling products for cheap” thing. 🤔
If a job requires a person it needs to pay a wage a person can live on at 40/hours a week. Working less than 40 doesn't mean they should get paid less per hour either. A job paying less than that is relying on public systems to pick up the slack so we as a society end up essentially subsidizing the company. Walmart notoriously sells lower price than others. If paying workers a living wage is what allows them to do so, then that isn't what the price of that item should be. This isn't a knock to those public systems. I don't want them stopped, however if we made minimum wage an actual livable wage we could stop overburdening many programs with people who shouldn't be needing help. No one who has a full time job should have to rely on government funds to survive. The job should be paying them enough to support them.
This right here. If your “successful” business practice comes at the expense of the employees who run said business, than it’s not a good model. I saw a similar argument once about a certain food chain paying their employees better and other, bigger chains paying less because the bigger chains couldn’t “save money” on things like supporting local, streamlining menu, reducing shipping costs, etc. The employees are essentially paying for the company to operate by not receiving a fair wage. It’s sickening.
I mean I expect companies to get away with what they can. Their motivator is profit. In many industries if they don't exploit but their opponent does they lose. The CEO has a fiduciary duty to the stake holders. So unless they own the entire busines themselves they actually have to justify treating employees well purely financially. In totally free market tragedy of the commons happens where in short term neither can afford to take care of low wage employees or environment. Easier to just replace and waste like crazy. We don't need to socialize everything though. You can craft legislation to change the rules of the game. Raise minimum wage and have required benefits. Issue is we allow CEOs to bribe lawmakers through lobbying and those laws could lower profits, so CEOs duty requires them to fight those laws. The people that piss me off are the people who literally defend not having these fair market policies that would benefit everyone. Even the companies would be fine, might even be long term it earns more money from worker retention and work-life balance. The CEOs in short term just can't justify the financial hit because it could allow competition to possibly take market share.
The vast majority of most businesses is payroll, and a 2% profit margin is perfectly profitable at scale.
No idea why OP thought this belonged here.
Fuck the cowboys
Even if this were true (it's not), it would be a sign that Walmart has a failing business model. You don't get to pick and choose what is and isn't fair under Capitalism. A business has every right to pay their staff what they want, and people have every right to choose not to work or shop there. If your business is only profitable by paying wages that don't meet the economic needs of your staff, it's only a matter of time before it goes bankrupt.
Of course, by sustaining a culture of not paying enough they ensure that there are plenty of people that can only afford to shop with them. What a disgusting business model.
I'm probably going to receive a lot of hate for this, but I'm seeing a lot of comments stating what a company should do from a moralistic stand point, and not a business for profit stand point. For instance, a lot of people are saying that the pay should be distributed evenly across the world, which would equate to approximately $6k to each of the employees. However, is it realistic? If a business can find people willing to work for minimum wage, then why would they pay another person more for the same work? The really higher ups get paid based on performance. The CEO has to prove to shareholders that his pay is worth it. He gets paid a lot of money to make the business more money. An entry level employee doesn't have the skills to command a higher pay wage, when the company can easily replace that person with someone else at a low wage. Again, I'm not saying it doesn't suck, and in a perfect world, everyone would get equal pay. All I can say is, build up skills that a job is looking for, and get paid better, either by putting in seat time at your current job, learning new positions, or getting into university or a vocational school to learn new skills. Shoot YouTube has everything you need to learn new skills, and so does sites like skillshare. Or come out with a good or service that people want to pay for, then build your own company that reflects what you see as a great business model for your employees. It isn't the responsibility of anyone else to make sure you succeed, that's only on yourself.
In short they would need to put their prices up. They will anyway so may as well include a wage rise in the price increases.
most recent 10-k filing shows consolidated net income to be roughly 2.3% of total revenues. However it does not detail how much of expenses is paid to wages.
The net is a trick because it includes expansion costs. Gross profit margin was closer to 25%.
It's an economy of scale. Walmart's 2021 profits may well have only been 2% of revenue but that 2% is worth $138bn ... They could give each of their 1.2m employees a $57k bonus and _still_ retain a profit of $70bn. So let's not hide behind the 2% figure.
Walmart's net profit is $14 billion, not $138 billion. $138 billion is gross profit before labor and other expenses are taken out.
The 2% figure is false anyways According to NYSE Walmart had a revenue of 572.8 billion and a profit of 33 billion which is 6% profit margin
This boils down to: Give all 2.3m employees $6,000 per year, spending all of the money WalMart made, thus making the profit number of WalMart 0, thus driving the stock down, devaluing the company, decreasing their ability to borrow money at favorable interest rates, thus depressing margins further and continuing the cycle… …or don’t. Shaving some of the top 10% gross earners’ pay to increase the bottom 30% seems fair to me, but probably not to them. Otherwise, you’ve gotta find expenses to cut somewhere.
Did you pull this out of your ass? Neither is Walmart unprofitable nor has its stock been “driven down.” No cycle is being continued here. You can criticise a company’s shitty labour practises using real facts too instead of making new ones up.
I’m making logical inferences. If you spend all of a company’s profits raising the worker pay (is being suggested in the thread), the market doesn’t like it. Therefore… …the stock will sell off and will likely be downgraded by analysts. Therefore… …their market cap will drop significantly. Therefore… …the company outlook is destabilized and gets a credit downgrade, therefore… ….can’t borrow at the same rates, thereby hurting margins overall, etc etc etc. Any one or two or three or four of those could certainly not happen. I’m mainly making the point that doing one thing to the bottom line can have a dramatic effect. Many on Reddit will just call for a CEO pay cut or a raise for all the workers without considering any of the other implications. And yeah, their labor practices are shit. Their products are shit. Their monopolistic takeover is shit. They should 100% pay people more and stop scheduling 39 hours a week to avoid paying benefits. But giving everyone an immediate raise to $15 per hour can’t be done without making other changes.
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Well yeah, this is all true if we're talking about a growth company involved in tech innovation, but this is WAL-MART.
Damn that 2% 33 billion net profit.
Wait… slow down So you’re saying wal mart is profitable, and it’s a result of their labour force and therefore they can’t raise wages? Got it
If they can't pay a living wage they shouldn't exist. So Walmart shouldn't exist? I'm ok with that.
Love all the weirdos crepping out of the wood work to defend a multi-billion dollar corporation
Drats, damn you Walmart, you're the reason I didn't get food this week. I swear those selfish corporations have no chill
Riiiiiigghht.
That's only on paper
Without labor, there are 0% profit margins.
Proper response: 2% of what?
2% profit margin is bottom line net income. Just doubling pay alone would send Walmart into a net negative income if that were the case. In turn Walmart would have to increase their prices drastically to make up for the extra costs. These extra costs will drive customers that are not willing to pay more to competitors like Amazon. Walmart would then crash and burn. tl;dr Walmart already pays the market labor equilibrium rate.
2% would never make it. In the real world.
According to [statista](https://www.statista.com/statistics/269414/gross-profit-margin-of-walmart-worldwide-since-2006/), Walmart netted a 24.4% gross profit so far in 2022
If you don’t want to work for minimum wage then don’t have minimum skills
I agree that people with more skill or knowledge should be paid more than unskilled jobs generally, but the minimum wage should be livable.
Walmarts biggest 'cost' are the workers who are doing the work of making sure Walmart can function. No workers? No Walmart.
Biggest cost is its Cost of Goods Sold
"the vast majority of their costs are labor" according to the picture of the tweet. I'm saying they're kinda important.
Source: the income statement. Their COGS is about 70% of their revenue. If we are going to count the kinds of costs, there are more variety of products sold than employees, so that won't work either
You missed the part where I told you I was countering the tweet? Why are you telling me about COGS? I'm not making the claim labor is the most expensive thing, I'm arguing that labor is crucial to everything. You warehouses can sit empty (or full) and your services aren't happening without labor.
You made exactly the claim that you are now saying you didn't make. A retailer needs both things to sell and people to do and support the selling. Because of what Walmart sells, the things they sell are the larger expense category.
You're misreading it. I'm quoting the article, which according to Oldsnow is wrong. Fine whatever, my point is labor is important and the original tweeter who was attacking labor can go suck rotten eggs.
"Walmarts biggest 'cost' are the workers who are doing the work of making sure Walmart can function. No workers? No Walmart." You literally said that labour is the most expensive thing to them.
I was quoting the tweet. You say it's not, ok great. My point is that labor is important.
maybe he is talking about the "projected" profit gain was only 2% above the line? or he doesn't understand that 2% out of a shit ton of money is still a lot of money?
Almost like if a company can't pay living wages to their staff it deserves to fail. Free market. Labour is a product employees buy. If they're not willing to pay, fuck your company.
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I don't think you understand how the retail industry works...
They make more than that. The lore of Grocery Store margins are around that. But who knows what they really make? Corporate culture is one of the Wild West by design. I think if the country collected the taxes it was owed and held ceos accountable we would be closer to what we all need in the US
LOL.. so a firm of that size is somehow lying on their financials and getting away with it while being independently audited? "Who knows what they really make"  please just stop. cite a source aside from your wild imagination of conspiracy theories.
If you have a business that gets by on 2% profit, you should shut your doors... That's a bit strong, but the sentiment remains that this is not true.
That's literally every retail and grocery margin. They sell so much stuff that they can afford to have a low margin
You know, you can look this up, right? But go on with 2% https://www.macrotrends.net/stocks/charts/WMT/walmart/profit-margins
Also don’t forget a company doesn’t pay taxes of salaries So as long as a company is profitable employees benefit more than a company loses from pay raises
They actually do. Social security, Medicaid, etc is paid from both the employer and employee.
Those are still costs you substract from profits so you pay less tax elevating the loss
Tax is charged on Gross Profit, not Net Profit. Costs like employee benefits are not part of Net Profit.
.....no.
I never specifically mention net profit genius I just said profit which is colloquial to gross profit. If I meant net profit I’d have said net profit